Closing Costs

There are certain basic fees accompanying closing the sale of a house. These fees are often divided between the buyer and seller, as noted in the sales contract. Many are customary, but there are nuances to each, so you’ll want a real estate specialist in California to help direct you through your transaction.

Loan-related closing costs

Points (optional)

Appraisal Fee

Credit Report

Interest Payment

Escrow Account

At closing, these taxes are usually paid

Property Taxes

Transfer Taxes and Recording Fees

At closing, these fees are often due

Homeowners Insurance

Flood or Quake Insurance (optional)

Private Mortgage Insurance (PMI) (optional)

Title Insurance

Sellers: As we negotiate your deal, not only will I work to get the best sales price, but I’ll also push for lower closing costs. And once we’ve arrived at an agreement, I’ll describe in detail the closing costs so you are informed of exactly where your money is going.

Buyers: If you are buying a house in Orange County, you’ll be given a “Good Faith Estimate” (GFE) of closing costs within three days of submitting your loan application. The estimate is based on the loan officer’s prior experience and is required to be within a suitable range so you’re not stunned when you get to the closing appointment. I’ll be glad to look at the GFE with you, answering your questions and highlighting any estimates that seem unusual.

Loan-related closing costs

Loan Origination Fee
This covers the administrative expenses in setting-up and processing the loan. The loan origination fee may be a percentage of the mortgage amount.

Points (optional)
An option for the home buyer is to pay points to lower the interest rate at which the loan will be repaid. Each point equals 1 percent of the mortgage amount. For example: on a $150,000 loan, 1 point would equal $1,500.

Appraisal Fee
The fee for having the house appraised may be incorporated into the closing costs or payment may be required by the lender at the time the loan application is submitted.

Credit Report
The lender uses a credit report to determine the creditworthiness of the loan applicant. This fee is often paid when the loan application is submitted.

Interest Payment
Typically the buyer is required to pay interest on the mortgage loan to cover the time between the closing date and when the first mortgage payment period begins. For example: If closing is on May 15. Your first monthly payment begins to accrue interest on June 1 with your first mortgage payment due July 1. At closing an interest payment covering the accrual period between May 15 and May 31 may be required.

Escrow Account
At closing a payment may be required to fund the escrow account if the lender is paying home insurance, property taxes and/or other expenses out of the escrow account.

Tax Closing Costs

Property Taxes
This is the one closing cost that is often prorated between the buyer and seller. If the seller has already paid the annual property taxes, the buyer typically reimburses the seller for the period in which the buyer will be occupying the property. Likewise, if the taxes have not yet been paid, the seller typically reimburses the buyer for the period in which the seller occupied the property.

Transfer Taxes and Recording Fees
This is the cost for transferring ownership of the property and recording the purchase documents. The fee is often calculated as a percentage of the sales price.

As your Buyer's Agent, I can help you find the perfect house for you, and as your Listing Agent, I'll get top dollar for your property. Call me, Irvine's real estate expert, at (714) 856-7003. I can help you make the decision that gets the outcome you want.